Individual Health Insurance Plan : Selecting the Right Deductible

If you are currently self-employed or work a part time job which doesn’t offer a health plan, you’ll probably want to consider getting an individual health insurance plan. When considering a health plan the main factor you’ll have to take into account is the premium in which you’ll have to pay. While at first blush it may seem a high deductible would be the right choice because the monthly premium will be lower, you should do some further evaluation before you base your decision solely on monthly cost.

What exactly are deductibles?

When you select an individual health insurance plan you will have several options available in the form of deductibles. A deductible is the amount of money you will have to pay out of pocket before your insurance will cover the rest. The deductible will reset annually. For example if your deductible is $1000 and you incur a $3000 bill in one year then another $5000 bill the next, you would have to pay $2000 and your insurance would cover the other $6000.

What level of deductible is right for you?

The three factors that will play heavily into whether you should go with a higher deductible are: Age, your health history, and your financial security. The younger you are the less likely it is that you will need a lower deductible. If you don’t have any pre-existing health problems or conditions than you may not need a lower deductible. Lastly, if you have a lot of cash reserves or liquid assets that could easily be turned to cash, if need be, you may not need a lower deductible.

As you get older more health problems are likely to arise. Therefore, if you are older you may want to consider getting a lower deductible. If you have previous health conditions then you will most likely want to get a plan with a lower premium. Lastly, if you don’t have a lot of cash on hand or any assets that can be converted to cash easily then you probably should go with a lower deductible.

It is important to take these factors into consideration when you are searching for an individual health insurance plan. You will have to find a balance between what you can afford on your monthly premium and what you could afford to pay out of pocket for medical expenses should you have any. Your health is the most important thing you can have, so getting a good health plan is an absolute must.

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